David’s Bridal LLC’s chief executive officer is betting the retailer’s reputation with brides will help it find a rescuer in bankruptcy, even in an era of backyard weddings and scaled-down events.
(Bloomberg) — David’s Bridal LLC’s chief executive officer is betting the retailer’s reputation with brides will help it find a rescuer in bankruptcy, even in an era of backyard weddings and scaled-down events.
David’s CEO Jim Marcum said in an interview that the company held discussions with private equity firms and potential strategic buyers since the retailer filed Chapter 11 and that he’s optimistic they’ll complete a sale to keep many of its nearly 300 locations open.
Company advisers are fielding potential bids through the end of May, he said.
“We have quite a few NDAs signed; we’ve got people doing a lot of work,” Marcum said. “It’s pretty active.”
Facing a severe cash crunch, David’s was forced to file bankruptcy this month without a deal to sell the business in hand.
The filing marks David’s second trip to bankruptcy court after it emerged in January 2019 from an earlier Chapter 11 with a plan that slashed about $450 million in debt from its balance sheet.
Marcum joined David’s in 2019 from Apollo Global Management and later oversaw an out-of-court restructuring that swapped another $276 million of term loan debt for equity in the business and injected $55 million in capital.
Soon after, Covid-19 forced David’s to temporarily shut its stores and set-off a major upheaval in the wedding industry, which still hasn’t fully recovered.
Now, David’s is navigating another bankruptcy as it deals with increased competition from traditional clothing retailers like Anthropologie, which sells conventional wedding gowns as well as casual white dresses and bridal jumpsuits.
Wedding planning is also taking longer, a headwind for David’s, because a backlog of receptions has made it more difficult to secure venues, delaying dress orders.
Even if David’s succeeds in securing a buyer, Marcum said it’s likely the retailer will have fewer locations once it leaves Chapter 11.
Still Optimistic
But David’s has reason for optimism.
The company still holds the biggest share of the nation’s wedding gown market, dressing about a quarter of all US brides. David’s has also continued to expand with the January launch of its wedding planning platform, Pearl, and offers more dresses for proms, formals, and quinceañeras.
The company has adapted to changing tastes, too: Marcum said sales of black and red colored bridal dresses “do very well.”
Despite changing consumer tastes, David’s stores are still a key stop for many brides.
Marcum described David’s shops as a “bridal showroom” and said 90% of all brides who purchase a dress booked an appointment through its website for an in-store visit.
Buying a wedding dress is such an important milestone that some brides and bridesmaids travel 100 miles to try dresses at a David’s store, Marcum said.
The company’s highest volume locations are in highly populated metropolitan areas, including Manhattan and Tampa, Florida, as well as Nashua, New Hampshire.
“They’ll drive from Canada to come down to our store for an appointment,” Marcum said.
David’s has already cleared an early test in bankruptcy: the Chapter 11 filing didn’t disrupt the retailer’s delivery of roughly 100,000 finished dresses in or on their way to stores and another 30,000 ordered dresses in production, Marcum said.
He said David’s store managers and other employees are “a passionate group” who have stayed focused on serving brides.
“I’ve been around a long time and I’ve seen a lot of different retail concepts throughout my career, and led many of them,” Marcum said.
“We’ll stay focused and the goal is to bring it over the finish line as a going concern.”
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